Hollywoodbets, primarily known for its betting operations, has made a significant leap into the telecommunications sector in South Africa by launching its internet service provider, Hollywood Connect.
The company has applied to the national telecommunications regulator for the transfer of two critical network licenses from East Coast Access, signalling a major shift in its business strategy.
Licences to Expand
Hollywood Connect seeks to acquire Individual Electronic Communications Service (I-ECS) and Individual Electronic Communications Network Service (I-ECNS) licenses.
The acquisition of these licenses will not only allow Hollywood Connect to offer Internet services across the nation but also enable it to establish and operate its own physical network infrastructure.
Regulatory Hurdles and Strategic Moves
The process for obtaining such licenses is fraught with regulatory challenges. I-ECNS licenses, for instance, can only be issued following a policy directive from the Minister of Communications, which is rare.
Since new licenses have not been issued since 2010, companies are often forced to acquire them second-hand at prices that can exceed R1 million— a detail that underscores the competitive and exclusive nature of this market.
Controversial Expansion or Clever Diversification?
Hollywoodbets’ strategic move has sparked a debate on whether this is a progressive step towards diversification or a controversial expansion to monopolize related markets.
Critics argue that a betting company moving into ISP services could lead to monopolistic practices, given the significant infrastructure and regulatory barriers that protect existing providers and limit new entries.
Local Presence and Future Aspirations
Currently, Hollywood Connect’s services are available only in select areas across Durban, where its network partner, Immedia Ecosystem, is based. The expansion plans suggest a rapid rollout of infrastructure and services nationwide, which is ambitious given the current regulatory and competitive environment.
Hollywoodbets’ move into the ISP market raises significant questions about the convergence of different business sectors and the implications for competition and consumer choice in South Africa. With the high costs and limited availability of essential licenses, Hollywoodbets’ foray into telecommunications is a business expansion and a high-stakes gamble that could reshape the industry landscape.
Conclusion: A Bold Bet or a Risky Roll of the Dice?
As Hollywoodbets pushes forward with its plans, the industry and regulators will scrutinize this transition closely.
The success or failure of this venture could set a precedent for other non-traditional entities looking to diversify into tightly regulated markets like telecommunications, potentially sparking further controversy and debate on the future of industry convergence in South Africa.
